Item 1.01. Entry into a Material Definitive Agreement.
On July 15, 2021, Arlington Asset Investment Corp. (the “Company”), a Virginia corporation, completed an underwritten public offering of $33,500,000 aggregate principal amount of the Company’s 6.000% Notes due 2026 (the “Notes”). The Notes were issued pursuant to the Company’s Registration Statement on Form S-3 (File No. 333-235885) (the “Registration Statement”). The offering was made pursuant to the prospectus supplement, dated July 7, 2021, and the accompanying prospectus, dated February 20, 2020, filed with the Securities and Exchange Commission pursuant to Rule 424(b) of the Securities Act of 1933, as amended (the “Securities Act”).
The Notes were issued pursuant to the provisions of an Indenture dated January 10, 2020 (the “Base Indenture”) between the Company and The Bank of New York Mellon (the “Trustee”), as supplemented by the First Supplemental Indenture dated July 15, 2021 (the “Supplemental Indenture”, and together with the Base Indenture, the “Indenture”) between the Company and the Trustee.
The Notes are senior unsecured obligations of the Company and rank equally with all of the Company’s other existing and future senior unsecured indebtedness and will be senior to its existing and any future indebtedness expressly made subordinate to the Notes. The Notes are effectively subordinated to all of the Company’s existing and future secured indebtedness, including all of its obligations under repurchase agreements (to the extent of the value of the assets securing such indebtedness) and structurally subordinated to all existing and future indebtedness (including trade payables) and preferred equity of the Company’s subsidiaries, financing vehicles or similar facilities. Interest on the Notes will accrue from July 15, 2021 and will be paid quarterly in arrears on February 1, May 1, August 1 and November 1 of each year, commencing on November 1, 2021. The Notes will mature on August 1, 2026. The Company may redeem the Notes in whole or in part on or after August 1, 2023, at its option at a redemption price equal to 100% of their principal amount, plus accrued and unpaid interest to, but excluding, the date of redemption.
If an event of default (as defined in the Indenture) occurs and has not been cured, the Trustee by notice to the Company, or the holders of at least 25% in aggregate principal amount of the Notes then outstanding by notice to the Company and the Trustee, may declare the entire principal amount of, and all accrued and unpaid interest on, all the Notes to be immediately payable.
The foregoing descriptions of the material terms of the Base Indenture, the Supplemental Indenture and the Notes do not purport to be complete and are qualified in their entirety by reference to the Base Indenture, the Supplemental Indenture and the form of the Notes, copies of which are filed as Exhibits 4.1, 4.2 and 4.3, respectively, and are hereby incorporated herein by reference.
The legal opinions of Hunton Andrews Kurth LLP are attached as Exhibit 5.1 and Exhibit 8.1 hereto.